Money is an important part of the interactions that people all over the
world make every day. People make transactions for goods and services using
money, ranging from necessities to wants.
Banks have been around as civilization has existed, and the
oldest banks
closest to the way we view them now are dated back to ancient Mesopotamia.
Banking that is best known today is retail banking, where users can store
their money, take out loans, or obtain a credit card. Today, the process of
banking has become a technological interaction, and there are different ways that
technology continues to affect this process.
Online Banking
What is Online Banking? How Does it Work?
Online banking is a form of retail banking.
With the advent of technology, there have been new
technological creations, such as e-commerce, which are commercial
transactions conducted electronically on the Internet, which has
resulted from online banking.
How is Online Banking Different from Brick and Mortar Banking?
The main difference between online banking compared
to brick & mortar banking, or in-person banking, is the fact that the user
doesn’t directly deal with another person. It is possible for someone to have
a bank account with a retail bank but never visit an in-person branch if they
create their account through online means. Online banking is more convenient
for those who have access to the Internet at their fingertips and find ease
in using the in-person. Subtracting the time a user would have to make to
an in-person branch visit saves time and energy, which can be used to do
other things. The user can access their account whenever they find a time
that is most convenient to them, rather than visiting an in-person branch
during the times the location is open when the user themself may be preoccupied.
Mobile Payment Platforms
What is Mobile Banking? How Does it Work?
Mobile banking uses the technology of online banks
to allow users to access their bank account statements, but it also allows
users to access the technology on a smartphone or mobile device, rather than
simply a computer. In addition to accessing your bank account, mobile banking
allows transferring money, depositing checks, paying financial statements,
and even receiving online help. It works by simply downloading the app, and
then being able to connect to the bank through mobile means.
Mobile Security
Over 55 million Americans use mobile banking when making their
purchases. Therefore, safety is a primary concern for most Americans.
Thankfully, mobile payment apps have similarly-tough security measures
as online banking apps-- making it nearly for hackers to access your
data remotely. However, over
59%
of people use the same password across all of their websites, meaning
that the way mobile payment apps get money stolen is user-based, rather
than software-based. Additionally, many hackers create fake mobile
payment apps, so it is crucial to look at the reviews of the software
before downloading mobile apps, especially for banking, on your phone.
Small Businesses
From Small Business Saturday to buying coffee from
the beloved local store, small businesses are a large and important part
in many people’s lives. Mobile payment apps mean that they will stay open
much longer.
Credit Cards?
Credit cards seem all-encompassing of
almost every consumer and major business. However, it’s significantly
harder for small businesses to stay up to date with the latest
credit card technology, because it costs so much money. Many
credit card companies and systems charge upwards of thousands
of dollars for software to be installed in a business, not
including the credit card fee that the companies will then
take away from each transaction. On average, the credit card
processing fee falls around
2%,
plus additional in-person processing fees, and cent interchange rates.
Or Mobile Payment?
Mobile payment apps and systems, on the other
hand, work to equalize the payment for smaller businesses in affordable
ways. While the processing rate for these apps, including Square,
PayPal, Venmo, Patreon falls closer to
2.5%, the process is much simpler and only requires the chip reader,
app, and a phone. Square, for example, does not charge small businesses
for the magstrip (magnetic strip) reader and instead, only charges for the
chip reader (which is only fifty dollars). Even further, Square does not
charge a monthly fee, and it keeps its processing fees steady
regardless of how profitable the small business is.
Trust in Banking
Convenience vs Safety?
As the process of banking modernizes, many people
have turned to online banking for its ease and accessibility. Despite its
successes, there are several reasons for public suspicion towards these platforms.
Identity theft and phishing, or the spread of fake emails meant to steal online
data, are among the drawbacks of the digital bank. However, new forms of
protection are being developed every day and there are numerous ways for users
to secure their information in a banking web service. General consensus, reflected
both on a large scale and within our survey results, show that the majority believe
that the benefits of not having to go to a physical location to meet their banking
needs outweighs the cons.
Keeping Customers Happy
After thorough analysis of the nuances in online
and in-person banking, one may still question how their information is being
protected. The answer to this question can be found in the extensive security
precautions that are used in the banking industry. Banks have been entrusted
with safeguarding money for centuries, leading to the development of greater
technologies to protect these assets. Digitally, financial applications(such as Venmo)
invest in encryption technology to prevent breaches from outside sources.
Another driving force in advancements of data protection technology is market competition. The applications
with the most secure platforms maintain higher customer bases and are more widespread.
An example of this can be seen in Paypal.
This is the most widely used way to transfer money online. The next best ranked are Google Wallet,
Venmo, OFX, and Western Union. Overall, there is a wide variety of banking institutions that
protect user data and provide great customer service. To stay on top and gain user trust,
as well as greater usage, these applications continue to find new ways to provide reassurance.
Money transfer companies do their best to provide safety to their users assets, but consumers can also
work to increase their money’s safety. Engaging in responsible online behavior and going to
trustworthy sites decrease the risk of a security breach. One such phenomena to watch out for
is spoofing.
Cyber criminals create fake shopping websites that ask for payment information or imitate well-known
institutions. Their sites will access online bank accounts to withdraw funds. You can learn more
about how to protect yourself below!
What Does the Future Look Like?
The future of banking is heading towards a more prevalent digital
presence in coming years. Consumers are drawn to online banking regardless of risks.
According to research featured in The Guardian, more than one in five adults in their
surveyed population were either likely to start using or planned to increase their use
of online banking in the future. A further 11% used internet banking services and had no
plans to change their usage, while just 4% planned to decrease their use of internet banking.
There is a steady upward trend in usage, and of those surveyed, those aged 16-24 were the
most confident users. The younger generations are latching onto this technological banking
wave and paving the way for new advances in the face of yesterday’s breakthroughs.
Best User Practices
How do I make sure my information is safe?
The information that is used in banking is
sensitive. Everyone wants to make
sure that their information is secure in order for their money to be safe.
When connecting to the Internet from a device, it is important to make
sure the connection is secure on the website used.
If the connection on a website visited is not secure,
other people, or hackers, can access the banking information submitted
on that unsecure website to log into online
or mobile bank accounts. When the connection is secure, the information
entered by the user is encrypted, allowing for safer conditions if
another person tries to look at the entered information.
It is important that when browsing the web
and inputting sensitive information, the
website's connection secure.
Watch these videos to learn how you
can keep your information safe on the Internet!
